As Bengal debt snowballs, question mark over Mamata’s pet protection programs

Kolkata, August 20 (IANS): Immediately after coming to power in West Bengal in the 2011 Assembly elections ending the 35-year Left Front rule in the state, Chief Minister Mamata Banerjee announced the Kanyashree programme. This annual payment, as well as a one-time payment to female students from a particular economic bracket, was intended to encourage them to pursue higher education and prevent early marriage.

The announcement was seen as a political masterstroke as it boosted Mamata Banerjee’s popularity among female voters in the state, especially those from lower and lower middle income groups.

Even then, some economists questioned the financial viability of the scheme given the huge recurring payment from the Treasury. But their voices of rational economic logic were silenced due to the massive popularity of the program, which also won a UN award for its uniqueness.

It was just the beginning. Kanyashree was followed by several other compensation programs such as free cycles, free tablets, free crop insurance and a free health insurance program for all regardless of financial background.

The latest was the Lokkhir Bhandar, the monthly allowance scheme ranging from Rs 500 to Rs 1,000 for women in the state. Although initially the program was limited to women of a particular economic bracket, later the Chief Minister opened the program to all women.

It can be said that these stipend schemes have undoubtedly helped the Trinamool Congress and Mamata Banerjee to increase their popularity and vote share in successive elections. However, at this time a major vacuum was created in the Treasury which is evident in the skyrocketing state government debt accumulated over the last 11 years of Trinamool’s Congressional rule. .

A simple comparison quoting figures from state government budget documents in different fiscal years will highlight the state’s precarious debt situation. At the end of the 2010-11 financial year, which was the last financial year under the Left Front regime, West Bengal had an accumulated debt of Rs 1.95 lakh crore.

Now, in March 2022, when the current finance minister, Chandrima Bhattacharya, presented the budget for the financial year 2022-23, she projected in the budget estimates that the total accumulated debt of the state will rise to Rs 5 .86 lakh crore from Rs 5.28 crore according to revised estimates for 2021-2022. This means that by March 2023, when the Trinamool Congress completes 12 years of uninterrupted rule, a whopping Rs 3.90 lakh crore will be added to the accumulated debt figure that the Trinamool Congress inherited from the Left Front in 2011.

Therein lies the question of how long the state government can continue with the giveaways based on market borrowings. The question is also whether, once the state government is forced to halt many of the programs due to lack of funds, will this halt backfire politically on the ruling party.

The finance minister believes that herein lies the uniqueness of the innovative thinking of the state government under the leadership of Mamata Banerjee who, despite the double pressure of interest on loans left behind by the Left Front regime and the Union government’s continued non-cooperation in realizing central funds, the state government was successful in continuing the social welfare programs. ‘I can guarantee that despite the difficulties faced by the state government, no welfare scheme will be cut in the future,’ he said.

A veteran Congressman from Trinamool, a member of the Lok Sabha, said these social welfare programs distinguish between the ruling party in the state and the ruling party in the Centre.

According to him, while on the one hand the Union government is cutting the budgets of various social welfare schemes and facilitating its corporate friends by foregoing bank loans, the West Bengal government is going in a completely opposite direction by ensuring the well-being of the people notwithstanding economic difficulties.

However, economists are of the view that such rampant spending on compensation schemes without any alternative source of revenue generation other than state excise has pushed the state government into a virtual debt trap. .

“The state government seems blissfully unaware of the alarming ratio of debt to state gross domestic product, which is already over 30%. The day is not far off when new loans will be used only for the old debt service and it will be the debt trap situation for the state government in economic terms,” said economics professor PK Mukhopadhyay.

Investment consultant and financial analyst Nilanjan Dey said if the state government is really serious about continuing at least some of these social welfare programs, it should focus on generating tax revenue from the state. ‘state from sources other than state excise. “The answer is to attract big investment in both manufacturing and services, which will add to state revenue and also generate jobs. But again, that will depend on how progressive the government is. state in modifying its land and special economic zone policies,” he said.

Political analyst Rajagopal Dhar Chakraborty believes that once the state government is forced to halt compensation programs due to lack of funds, it will turn politically against the ruling party.

“The problem with allowances or gifts

the politics is that as long as the state government continues with the allowance schemes, the ruling party is the hero for the voters. But once such projects have to be halted due to economic constraints, the same hero turns into a villain overnight. People will not understand the economic imperatives and will not remember the benefits of the diets they have reaped for so many years,” he said.

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John A. Bogar